How are my contributions assessed in a family law property settlement?

It is not uncommon during a marriage or a de facto relationship (marriage) that the husband or wife makes a greater financial contribution through their initial contributions to the marriage, during the marriage or even following separation. When a relationship breaks down, often the party who has made a greater contribution has questions about what they are entitled to.

There are several steps in determining a party’s entitlement in a family law property settlement. The starting point is to know what the assets and liabilities of the marriage are. Assets can include things such as the family home, bank accounts and even superannuation. Liabilities can include the mortgage over the family home, credit card debt and even company debts.

Once this is worked out, the contributions must be looked at. There are several types of contributions that may be considered and includes:

• financial contributions – can made directly or indirectly to the “acquisition, conservation or improvement of any property of the parties” and can include paying the deposit for the purchase of the family home (direct) or where one party purchases groceries so that the other party can pay the mortgage (indirect) or through skill of expertise (special);
• non-financial contributions to the “acquisition, conservation or improvement of any of the property of the parties” such as making improvements to the family home through their own labour;
• non-financial contributions including homemaker and parenting contributions.

The Family Law Act (1975) governs the different types of contributions. There is no set formula as to how property of the marriage is divided as matters are assessed on a case by case basis.

In relation to financial contributions, previously it was held that a party could make a “special” contribution, either through skill or expertise and have a larger entitlement to the assets at separation. The courts decided a number of cases approximately four years ago that held it is no longer the case that “special” contributions are more important than other contributions.

However, in relation to non-financial contributions, the courts will consider contributions such as parent and homemaker, as being just as important as financial contributions.

Having determined the asset pool and assessed the contributions of the parties, the next step is to look at the future needs of the parties that might result in a party getting a greater percentage of the asset pool. Having done all of that and if a Judge or Registrar of the court is deciding the case, he or she will determine the “just and equitable” division of property.

If I am advising you on your property settlement, I will undertake an assessment as above, in order to provide a realistic estimate of your entitlement to the property of the marriage.

The above information is a short overview of factors, particularly those relating to contributions, that will be considered by a Court in property proceedings. As it is a complex area, it is important to get advice from an experienced family lawyer.

If you would like some advice specific to your circumstances, or have any questions relating to the above, please contact our team.